Tag Archives : Build House

US economy shrunk at slower pace in second quarter, new estimate shows

The U.S. economy shrunk at a slower pace between April and June than the federal government initially calculated, according to revised data released Thursday by the Bureau of Economic Analysis.

The BEA said U.S. gross domestic product fell at an annualized rate of 0.6 percent during the second quarter of 2022. That’s down 0.3 percentage points from the 0.9 percent decline the agency estimated in July.

The BEA issues three estimates of each quarter’s change in GDP to incorporate new and revised data. The agency said the second quarter dip in economic activity was less severe than first believed after looking at broader, more complete data on consumer spending and private inventory investments.

Personal consumption expenditures — a catch-all for consumer spending — rose 1.6 percent in the second quarter of 2022 according to revised figures, up from an initial estimate of 1 percent.

Spending on goods fell far less than first estimated, dropping 2.4 percent between April and June instead of the 4.4 percent decline initially estimated. Spending on services rose 3.6 percent, 0.6 percentage points below BEA’s first estimate.

While the decline in growth was less severe than first estimated, the U.S. economy still appeared to contract for two consecutive quarters after Thursday’s revisions. 

Two straight quarters of negative GDP growth has long been a rule-of-thumb threshold for a recession in the U.S. But economists have warned that the strength of the U.S. labor market and other pockets of the economy make it unlikely the country is currently in recession.

Gross domestic income, another measure of economic output, rose at an annualized rate of 1.5 percent during the second quarter after a gain of 1.8 percent in the first quarter.

Developing

Source: TEST FEED1

NYC officials say Texas Gov. Abbott is using wristbands to place barcodes on migrants bussed to city

New York City officials claim that Texas Gov. Greg Abbott (R) is placing barcodes on migrants who were bussed to the city, calling the move an intimidation tactic amid the escalating feud over migrants in the U.S.

CBS affiliate WCBS published a video on Wednesday showing migrants arriving in New York City wearing wristbands with barcodes on them. 

A total of 237 of those migrants on the five bus loads were also subjected to an unseen security system that has not been used in the city, according to WCBS. 

In response to the video, some NYC city officials expressed their disapproval of the treatment of the migrants. 

“Gov. Abbott is bar-coding people and treating them as less than human, as if they were cattle,”  NYC’s Commissioner of Immigrant Affairs Manuel Castro told the news outlet. “I was incredibly shocked when I saw children with bracelets and bar codes and security personnel treating them as less than human beings.”

Castro also believed that Abbott placed the barcode wristbands on the individuals in an effort to intimidate them. 

“We know that Gov. Abbott has been trying to dehumanize people, trying to foment anti-immigrant hatred, and while New York will continue to welcome asylum seekers, it’s also our moral responsibility to denounce this kind of behavior by Gov. Abbott,” Castro added. 

The new complaints come as Abbott has been sending an influx of migrants from the southern border to cities on the east coast in a protest of the Biden administration’s immigration policies. 

The Biden administration rescinded Title 42 earlier this year, a Trump-era policy that blocks migrants from entering the U.S. due to health concerns implemented during the COVID-19 pandemic.

New York City Mayor Eric Adams (D) has asked for federal assistance on this issue, even sparking a war of words with Abbott, calling for him to be voted out of office by November’s midterm election and accusing the governor of using migrants “as political pawns to manufacture a crisis.”

Source: TEST FEED1

No, the IRA is not a carbon tax — but it would be cheaper if it were

The 2022 Inflation Reduction Act (IRA), signed into law by President Biden on Aug. 16, includes provisions for lowering the deficit and lowering prescription drug costs even as it subsidizes substantial investment in renewable sources of clean energy. It devotes $369 billion to those investments. It derives its funding by imposing a 15 percent minimum tax on large corporations and a 1 percent excise tax on corporations’ buying back their own stock; it also funds enhanced IRS enforcement applied to high-income taxpayers.

With regard to climate change, the IRA targets roughly a 40 percent cut greenhouse gas emissions relative to 2005 levels by around 2030, but it is silent about what happens if that target is not met.

Some think these programs will not be as effective as anticipated so that goals will not be achieved because there are real-world obstacles that have not been included in the budget impact and economic efficacy calculus. Others, like me, think that the prescribed goals and objectives will more than meet expectations because there are real-world opportunities that come into play given the strong and, frankly, unexpected signal of significant U.S. action on climate change. That translates into an anticipation that relying on carbon in your business planning and personal investment will become increasingly expensive and decreasingly profitable.

Two caveats apply at this point. The first is the 40 percent by 2030 target. The lates Carnegie Mellon University Professor Lester Lave, an old colleague, once advised that economists should give a date or a number but not both. Emissions will be down by 2030, but perhaps not by 40 percent. Emissions will be down by 40 percent, but perhaps not before 2031. The real question is whether or not the IRA will put us on a trajectory that keeps open the potential of achieving the long-term goal of net-zero emissions sometime well before the turn of the next century.

The second caveat arises from the simple fact that the IRA does not explicitly price carbon at the point of its use. Economists have long pointed to the efficiency of such a plan, but the U.S. Congress (particularly the Senate) is allergic to taxing carbon. Indeed, five carbon pricing and revenue-sharing bills have been proposed in this 117th Congress, but none of them has come anywhere close to the president’s little signing desk.

So, is there any way to infer that the IRA contains enough pricing substance to pick up the efficiency gains of a pricing mechanism? I think so — at least modestly.

In the first and most obvious instance, the new law increases or tax credits for capturing and (re)utilizing or sequestering carbon dioxide at industrial facilities and power plants. The increase is from $50 to $85 per ton for carbon stored by industry and from $30 to $60 per ton if it is used in drilling. The increase is from $50 to $180 per ton for carbon removed from the atmosphere if it is stored and from $35 to $130 if it is used. Don’t look now, but these are ranges on the price of carbon that are higher than last month. They set a context for decision-makers looking to the future when their use of carbon might be taxed at a socially accepted price that will persistently climb over time.

In a second less direct way, the IRA creates “shadow prices” for carbon that are related directly to its various investment provisions. Take, for example, the incentives for individuals to install solar panels. They will reduce personal and industrial demand for electricity from fossil fuel plants by very simple economically driven substitution. Every student in an introductory economics course would understand that.

The extended point about shadow prices is not much more complicated. There is a price of carbon (tax) that could accomplish the same substitution. That is a shadow price reflective of a tax intervention that would be equivalent to the IRA effects.

The shadow price will even increase as solar investments increase over time in projectable ways. Even though nobody is paying a “shadow tax,” investors in all sorts of energy projects will likely use the distributions of those prices as signals — representations of the effects of IRA that will influence their decisions of where to put their long-term investment money. These are the opportunities mentioned above. 

The IRA creates an economic environment that is muddier than one in which there would one price for carbon that would increase every year at a predictable rate. There is a different shadow price for each component in IRA and there are codified ranges for carbon capture, utilization and storage. That variability is a source of efficiency loss. So, too, is inertia in industrial policy that has been created by the IRA. Finally, the IRA generates its compensating revenue from tax provisions that are not at all related to carbon emissions while a carbon tax directly influences the relative prices of all goods with respect to their carbon content.

There are efficiencies that have been foregone for political expedience, but the IRA can nonetheless have a comparable long-term effect on reducing fossil fuel reliance. It is better than nothing by a long shot.

It is not a solution, though. There are no solutions to the climate problem. We can only create some combination of abate, adapt and suffer. So, the real questions in evaluating the IRA are only:

1) Is it enough to put us on the right track?

2) How soon will we have to make a mid-course correction?

Gary Yohe, Ph.D., is the Huffington Foundation professor of Economics and Environmental Studies, Emeritus at Wesleyan University.

Source: TEST FEED1

Emails show Trump lawyer agreed Archives should get requested records: report

Newly revealed emails show that former White House counsel Pat Cipollone agreed that materials the National Archives requested be returned by President Trump should be given to the agency.

Cipollone, who also severed under the Trump administration as a designated representative to the Archives, reportedly told National Archives and Records Administration (NARA) chief counsel Gary Stern that the documents needed to be returned, The Washington Post reported. 

“It is also our understanding that roughly two dozen boxes of original presidential records were kept in the Residence of the White House over the course of President Trump’s last year in office and have not been transferred to NARA, despite a determination by Pat Cipollone in the final days of the administration that they need to be,” Stern wrote in an email to Trump’s lawyers in May 2021, according to the Post.

According to the report, NARA officials grew concerned about Trump and his team keeping dozens of boxes of official documents and repeatedly declining requests to return those documents. 

Stern also noted in his emails to Trump’s legal counsel that two classified documents, which were letters from North Korea President Kim Jong Un and former President Obama, were missing from their archival list. 

“We know things are very chaotic, as they always are in the course of a one-term transition,” Stern wrote in the email. “ … But it is absolutely necessary that we obtain and account for all presidential records.”

Stern also wrote in the emails that he consulted with other attorneys in Trump’s legal counsel to return the requested documents. 

The report comes after the FBI conducted a search warrant at Trump’s Mar-a-Lago residence earlier this month, as authorities searched for classified documents Trump brought to his Florida residence after the end of his term at the White House. 

Trump returned up to 15 boxes of classified documents to the NARA earlier this year, as NARA officials continued to urge Trump’s team to look for more documents at his Florida residence;  referring the matter to the Department of Justice as well, the Post noted.

Source: TEST FEED1

The Hill's Morning Report — Will Biden’s student loan plan pump up the base?

President Biden on Wednesday unveiled a student loan forgiveness plan to appeal to tens of millions of borrowers, many of them young, with a simple refrain: Under Democrats, the government works to help those who need it the most.

The Americans he has in mind, the president said, are “working and middle-class people hit especially hard during the pandemic.”

Perhaps. But the president has agonized since his campaign about how to fulfill the aims of liberals, who sought substantial, near-total student loan debt forgiveness, and those in both parties who chafe at changes they see as an unfair giveaway, or, worse, a wasted, inflationary federal exercise in currying political favor and one that is unlikely to constrain sky-high college tuitions and costs.

The Associated Press reported that if Biden’s plan survives legal challenges that are almost guaranteed, it could offer a windfall to many ahead of this fall’s midterm elections.

More than 43 million people have federal student debt, with an average balance of $37,667, according to federal data. Nearly a third of borrowers owe less than $10,000, and about half owe less than $20,000. The White House estimates that the president’s plan would eliminate the federal student debt of about 20 million people.

“That’s 20 million people who can start getting on with their lives,” Biden said at the White House. “All this means, people can start to finally crawl out from under that mountain of debt. To get on top of their rent and utilities. To finally think about buying a home or starting a family or starting a business.”

The outline of the administration’s plan calls for erasing up to $10,000 in federal student loan debt for borrowers making less than $125,000 annually. For those in lower income brackets who received Pell Grants, the forgiveness will be $20,000. In addition, the current moratorium on repaying student loan debts, which expires next week, will be extended for the seventh time until January (The Hill). 

The White House added an additional ingredient: Borrowers with undergraduate loans can cap their repayment at 5 percent of their monthly income. Current students with loans are also eligible for this debt relief, and dependent students will be eligible for relief based on their parents’ income. 

For details about elements of the policy, borrowers can check studentaid.gov. 

Biden, joined by Education Secretary Miguel Cardona, drew a sharp contrast between the aims of Democrats, who he said are trying to lift the burden of debt from lower-income, higher education borrowers whose opportunities are constrained by steep economic obligations, and those wealthy enough to lessen their obligations with tax breaks.

When a reporter asked the president whether his plan was unfair to those who have repaid student loans or chose not to borrow in the first place, Biden replied, “Is it fair to people who, in fact, do not own multi-billion-dollar businesses if they see one of these guys getting all the tax breaks? Is that fair? What do you think?” (The Hill).

Some progressives, who have long pushed for $50,000 in debt forgiveness, were disappointed (The Hill). Others on the left praised the plan. Sen. Elizabeth Warren (D-Mass.), who made the issue part of her own run for the White House and met with Biden to discuss his options, tweeted, “Today is a great day. 20 million Americans will never have to make another student loan payment. Another 23 million Americans will have significant relief on their student loans. This is about helping America’s middle class and providing relief to those who need it most.”  Moderates, on the other hand, now have to respond to questions about whether Biden’s plan worsens inflation (The Hill).

And Republicans, who are assailing the administration over inflation and rising prices, pounced. Senate Minority Leader Mitch McConnell (R-Ky.) said Biden’s plan amounted to a “wildly unfair redistribution” of wealth (The Hill).  

Some economists who served previous Democratic presidents were unimpressed. 

“Pouring roughly half trillion dollars of gasoline on the inflationary fire that is already burning is reckless,” tweeted Jason Furman, former adviser to former Presidents Clinton and Obama. “Doing it while going well beyond one campaign promise ($10K of student loan relief) and breaking another (all proposals paid for) is even worse.”

Rep. Tim Ryan (D-Ohio), who is running for a Senate seat in a red state won decisively by former President Trump two years ago, distanced himself from Biden’s plan. “Instead of forgiving student loans for six-figure earners, we should be working to level the playing field for all Americans,” he said in a statement.

Beth Akers, an economist and senior fellow writing for the right-leaning American Enterprise Institute, on Tuesday said the net result of the president’s loan forgiveness plan is political more than economically cohesive, and she noted that Biden acted with his own say-so and opted to sidestep the legislative branch in a tough election year (Bloomberg News).

“If Biden were in it to help struggling borrowers, he’d be working with Congress to enact systemic reform that would make things better for future students,” she added, “shoring up existing safety nets, streamlining repayment to minimize the hassle for borrowers, and avoiding driving up future borrowing and prices.”

Related Articles

▪ The Hill: Here’s what’s inside Biden’s historic student debt forgiveness plan.

▪ The Hill: How will Biden’s student loan debt plan impact inflation?

▪ The Hill: Student loans received prior to a cutoff date of June 30 are eligible for the president’s debt forgiveness plan. 

▪ The New York Times: What you need to know about Biden’s loan forgiveness plan.

▪ CNBC: Explainer: Biden’s plan for borrowers: Who is eligible, how it works, when to apply. 

▪ USA Today: For public workers, the administration also canceled about $10 billion in student loan debts, benefiting 175,000 people.

LEADING THE DAY

➤ POLITICS

Tuesday night’s elections, headlined by a massive special election result in New York, gave national Democrats a major boost and hope that the November elections might not be nearly the walloping prognosticators and political watchers have been expecting for much of the past year.

Pat Ryan, a Democratic county executive, narrowly defeated Republican Marc Molinaro in the race for a House seat, previously occupied by New York Lt. Gov. Antonio Delgado (D), in New York’s Hudson Valley that has been a swing district in recent years. The results were the latest in a series of surprises for the party in power, which struggled for months to find an effective messaging strategy. 

Ryan campaigned in large part on abortion access after the Supreme Court struck down Roe v. Wade in late June, with his win coming only weeks after Kansans voted against an state constitution amendment that would have said there’s no right to an abortion in the state. The two contests show the party that it has a potent talking point that is driving voters out even during a time with high inflation and economic uncertainty. 

“It’s a friendly reminder that, every time the narrative counts us out, we know how to change it,” Antjuan Seawright, a Democratic strategist and senior adviser to the House Democratic campaign arm, said. “You can’t always predict what defines an election six or seven months out.”

The road to keeping the majority is still a tough one for Democrats. After the results Tuesday night, the party holds a 221-212 advantage, with two vacancies, meaning Republicans need to pick up only a small number of seats. National Republican Congressional Committee Chairman Tom Emmer (R-Minn.) on Wednesday dismissed the result as a “quirk” (Axios).

▪ Niall Stanage: The Memo: New York provides latest example of abortion’s impact.

▪ FiveThirtyEight: Yes, special elections really are signaling a better-than-expected midterm For Democrats.

▪ James Hohmann, The Washington Post: In New York, Democrats chart a new, centrist course.

▪ Nate Cohn, The New York Times: Growing evidence against a Republican wave.

However, there are still issues for Democrats on the ballot in November. As The Hill’s Brett Samuels details, some remain reluctant to tether themselves to Biden, even amid a stretch of legislative victories in recent weeks. 

Buoyed by those results, including the passage of the reconciliation bill, Biden has seen his approval ratings tick upward. However, that has not translated to the campaign trail as Democrats have yet to embrace him with open arms in their own races. 

▪ The Hill: LGBTQ+ candidates win in Florida in aftermath of “Don’t Say Gay.”

▪ The Washington Post: Ex-Interior Secretary Ryan Zinke lied to investigators in casino case, watchdog finds.

▪ ABC News: Foreign politicians, an indicted election clerk and Vanilla Ice: Inside the revolving door of Trump’s Mar-a-Lago.

IN FOCUS/SHARP TAKES

➤ CONGRESS

A fight is brewing on Capitol Hill as top Democrats scrap and claw to fill the top spot on the House Oversight and Reform Committee following the ouster of Chairwoman Carolyn Maloney (D-N.Y.) on Tuesday night. 

At least three House Democrats have their sights set on nabbing the post, which was held for nearly a decade by the late Rep. Elijah Cummings (D-Md.) before Maloney took over in 2019. Rep. Gerry Connolly (D-Va.) was first out of the gates on Wednesday, saying in a statement that he has made the panel his “top priority” during his 14 years on it.

“We need a tested leader who will not be timid in the face of Republican insurrectionists. One who has a deep understanding of the issues facing our Committee and our country. A collaborator who can be a bridge to our talented and diverse caucus,” he said in a statement. “I believe I can be that leader, and look forward to earning the support of my colleagues.”

Rep. Stephen Lynch (D-Mass.), the chairman of the National Security Subcommittee, also made it clear his intentions to win the top spot. In a letter to House Democrats, he noted he is “the most senior member of the Oversight Committee seeking this position.” 

However, one figure of interest is Rep. Jamie Raskin (D-Md.). Despite having been in office since only 2017, he served as the lead impeachment manager of Trump’s Senate trial last year, giving him a national profile unlike either of the other two candidates. 

Raskin, who chairs the Civil Rights and Civil Liberties Subcommittee, said on Wednesday that he is “strongly considering” a run. He was also handed a boost as Rep. Ro Khanna (D-Calif.), a progressive who was also initially considered a possible candidate for the post, tweeted that he “would like to see” Raskin run for the post and called on progressives to rally behind him.

“He has done a masterful job standing up for democratic principles and norms and embodies the highest ideals of patriotism,” Khanna said. “He is meant to lead in this moment.”

If Democrats lose the majority, the top member on the panel will be tasked with combating GOP investigations of the president, including into his son Hunter Biden (The Hill). 

▪ Politico: Maloney loss prompts Dem pileup for top spot on investigative panel.

▪ Government Executive: The race has begun to be the next House Democrat overseeing federal agencies.

▪ The Hill: A House panel detailed the pressure on the Food and Drug Administration by the former Trump White House behind discredited COVID-19 treatments and vaccines in 2020, according to a report released on Wednesday.

The Senate Judiciary Committee announced it will hold a Sept. 13 hearing to dive into whistleblower allegations about security problems at Twitter. The hearing could have consequences for Elon Musk’s now-withdrawn bid to purchase Twitter. The Senate investigation will feature testimony by Peiter “Mudge” Zatko, who will appear in response to a subpoena regarding his critical disclosures about the company, which Twitter denies (The Hill).

➤ STATE WATCH

The California Air Resources Board plans to ban sales of gasoline-powered cars by 2035. The anticipated regulatory move is expected to transform the nation’s auto market (Politico).

Conor Friedersdorf, The Atlantic: Gavin Newsom, the Ron DeSantis of the left.

In Texas, a federal judge this week temporarily blocked the federal government from a legal interpretation that would require hospitals in the state to provide abortion services if the health or life of the mother is at risk. The Department of Health and Human Services said it was reviewing the decision. 

In Idaho a federal judge on Wednesday temporarily blocked the state’s near-total ban on abortion, saying it violated the Emergency Medical Treatment and Labor Act, a federal law commonly referred to as EMTALA (The Hill). The state’s law, scheduled to take effect today, is now on hold while the Justice Department suit is argued.

The Hill: Utah sues Biden over restored Grand Staircase-Escalante and Bears Ears national monument boundaries. 

OPINION

■ Beware the emerging alliance between Russia and Iran, by David Ignatius, columnist, The Washington Post. https://wapo.st/3wuYcFf 

■ Can Japan learn to love nuclear power again? by Gearoid Reidy, columnist, Bloomberg Opinion. https://bloom.bg/3QTBC1h

WHERE AND WHEN

The House will meet at 10 a.m. for a pro forma session on Friday. It will reconvene on Sept. 13.

The Senate convenes on Friday at 10 a.m. for a pro forma session during its summer recess, which ends Sept. 6.

The president will depart the White House this afternoon to speak at a 5 p.m. reception hosted by the Democratic National Committee in Montgomery County, Md., outside Washington. Biden will headline a DNC grassroots rally at 7 p.m. and be back at the White House by 8:25 p.m.

Vice President Harris has no public events. 

The White House daily press briefing is scheduled at 12:45 p.m.

The annual economic policy forum at Jackson Hole, Wyo., sponsored by the Federal Reserve Bank of Kansas City, begins today (Reuters and The Wall Street Journal have previews).

Economic indicator: The Labor Department at 8:30 a.m. will report on filings for unemployment benefits in the week ending Aug. 20.

🖥  Hill.TV’s “Rising” program features news and interviews at http://thehill.com/hilltv, on YouTube and on Facebook at 10:30 a.m. ET. Also, check out the “Rising” podcast here.

ELSEWHERE

➤ INTERNATIONAL

Ukrainian President Volodymyr Zelensky has condemned the civilian deaths of what this morning are 25 victims, including two children, killed on Wednesday by a Russian rocket attack aimed at a train station in central Ukraine (The Associated Press). The strike occurred during Ukraine’s independence day, also the six-month mark since Russia’s invasion of its neighbor. 

In Russia, authorities detained Yevgeny Roizman, the former mayor of Yekaterinburg and an outspoken critic of President Vladimir Putin for comments made about the war in Ukraine. Roizman was charged with “public dissemination of deliberately false information about the use of the armed forces of the Russian Federation,” according to a post on his Telegram account (The Wall Street Journal).

Laura Kelly, reporting for The Hill from Kyiv: Ukraine puts captured Russian war machines on display at muted Independence Day.

In a major policy shift, Japan announced on Wednesday that it will restart more idled nuclear power plants and look into the development of next-generation reactors in response to increased gas prices throughout the country. Japanese Prime Minister Fumio Kishida made the announcement on Wednesday, saying that the government is also looking into how to extend the lifespan of current reactors. The decision comes more than a decade after the Fukushima nuclear disaster, which was the most severe nuclear accident since Chernobyl 25 years earlier (Reuters).

The Hill and NBC News: Three U.S. soldiers suffered minor injuries in Syria during rocket attacks, the Pentagon said on Wednesday.

➤ PANDEMIC, POX & HEALTH

First lady Jill Biden tested positive for COVID-19 in a “rebound” case of the virus, having tested negative only a day earlier. The first lady is not experiencing any COVID-19 symptoms, a spokesman said on Wednesday, adding that she will remain in isolation in Delaware. The president is considered a close contact of hers, so he will mask for 10 days when indoors and close to others (The Hill).

More than 2 million Americans are not working because of long COVID-19, a loss of some $170 billion in wages a year, according to a Brookings Institution report released on Wednesday (The Wall Street Journal).

Japan, previously one of the most restrictive countries in terms of COVID-19 and international visitors (remember the Olympics?), announced Wednesday a loosening of its requirement for vaccinated travelers to have a negative coronavirus test before being allowed to enter the country. Japan still requires tourists to be a part of an authorized tour group, their every move watched closely by a licensed guide (although the guide restriction is under discussion) (The Washington Post).

Total U.S. coronavirus deaths reported as of this morning, according to Johns Hopkins University (trackers all vary slightly): 1,042,398. Current average U.S. COVID-19 daily deaths are 390, according to the Centers for Disease Control and Prevention.

THE CLOSER

Take our Morning Report Quiz

And finally … It’s Thursday, which means it’s time for this week’s Morning Report Quiz! Inspired by this week’s 102nd anniversary of the certification of the 19th Amendment that gave women the right to vote, we’re eager for some smart guesses about the history of the famed constitutional amendment.

Email your responses to asimendinger@thehill.com and/or aweaver@thehill.com, and please add “Quiz” to subject lines. Winners who submit correct answers will enjoy some richly deserved newsletter fame on Friday.

Roughly how many women were handed the right to vote in the 1920 presidential election following the 19th Amendment’s certification?

     1. 21 million

     2. 26 million

     3. 33 million

     4. 40 million

What was the 36th state to ratify the 19th Amendment, marking the completion of the ratification process?

     1. West Virginia

     2. Tennessee

     3. Delaware

     4. None of the above

Women’s Equality Day was established in which year?   

     1. 1970

     2. 1973

     3. 1977

     4. 1980

What year did the 48th and final state eventually ratify the 19th Amendment?

     1. 1970

     2. 1976

     3. 1984

     4. 1990

Stay Engaged

We want to hear from you! Email: Alexis Simendinger and Al Weaver. Follow us on Twitter (@alweaver22 & @asimendinger) and suggest this newsletter to friends!

Source: TEST FEED1

Vulnerable Democrats prepare to fend off attacks over Biden student debt plan

President Biden’s student loan forgiveness announcement is throwing a curveball into the final months of campaigning for vulnerable Democrats.

Biden announced on Wednesday that borrowers earning less than $125,000 per year could see up to $10,000 of their federal student loans forgiven, with Pell Grant recipients seeing $20,000 canceled. 

The move was widely praised, but it could also present a predicament for some Democrats in swing districts: It’s less money than many on the left had hoped for, but the announcement may also force them to answer questions about how it could impact inflation.

“This student loan scenario will not make everybody happy,” said Democratic strategist Antjuan Seawright. “There’s no way to make everyone totally happy on this, but I think this president is taking a step in the right direction in terms of doing something.”  

Forgiving student loan debt was a common theme on the 2020 campaign trail, and progressives have been clamoring for Biden to take action since he took office. 

But the issue is also divisive. Thirty-four percent of respondents in a new CNBC poll said only those in need should have debt forgiven, while 32 percent say all of those with student loan debt should have it forgiven. Thirty percent say no debt should be forgiven.  

Republicans have already used the issue to hit moderate Democrats, seeking to tie them to their progressive colleagues in districts with decidedly centrist tilts. 

Following Biden’s announcement on Wednesday, Republican National Committee Chairwoman Ronna McDaniel referred to the move as “Biden’s bailout for the wealthy.” 

“As hardworking Americans struggle with soaring costs and a recession, Biden is giving a handout to the rich,” McDaniel said in a statement. 

On Tuesday, as reports of the upcoming announcement began to emerge, the National Republican Congressional Campaign Committee (NRCC) sought to tie Democratic Virginia Reps. Abigail Spanberger, Elaine Luria and Jennifer Wexton to the administration’s move.

“Will Elaine Luria, Abigail Spanberger and Jennifer Wexton condemn this irresponsible plan that will make inflation even worse?” an NRCC press release asked.

Spanberger and Luria are facing particularly contentious reelection bids, with the Cook Political Report rating their races as “toss-ups.” 

When asked about Biden’s announcement in an interview with The Hill on Tuesday, Spanberger said she still needed to dig into the details of the proposal, pivoting to discussing higher education costs more broadly. 

“One of the things I think we need to be talking about is the overall expense related to higher education,” Spanberger said. “While there’s many opinions about loan forgiveness, how much it should be, how much it shouldn’t be, minimums, maximums, all of the rest, the bottom line is that we continue to see education prices go up year by year at really exorbitant rates.” 

“What I want to make sure is never absent from this conversation is are we actually getting at the heart of the problem, which is Americans are graduating or in some cases not graduating with exorbitant amounts of debt and not coming anywhere close to earnings that all them to pay that off,” she added 

Lanae Erickson, senior vice president for social policy, education, and politics at the center left think tank Third Way, echoed Spanberger’s message about the cost of higher education in the U.S. and urged other Democratic candidates to adopt a similar message. 

“The Biden administration is taking this action, it’s not being voted on by the front-liners who have to win in these districts,” she said. “But they can talk about the fact that this has to be the beginning, not the end, and that we need to reform our higher education system so we’re not back here again in five years because this cannot be an every five years problem.” 

Still, he warned Republican attacks against loan forgiveness attacks could have traction with less affluent voters who have moved away from the party in recent years. 

“Obviously for folks who have never gone to college, which is a group that Democrats have been eroding supporting among, this does send a message that Democrats are more concerned about issues that affect more elite voters than themselves,” Erickson said. 

Supporters of Biden’s move concede that it will not be universally praised, but also call it progress. 

“This shows that the Biden administration is pursuing common sense debt relief,” said Jon Reinish, a Democratic strategist. “And good for them, they are not caving to far left, wacky socialists on the fringe of the party who want to do another big spending, write a blank check giveaway.” 

Democrats have praised how Biden’s approach is targeted at specific income brackets, rather than a blanketed approach. Additionally, they point to how the action helps groups like women and people of color in particular. According to the National Center for Education Statistics, Black college graduates owe $25,000 on average more than white college graduates.

“This president and this administration has been very effective and efficient on doing everything they can in particular for African American students and [Historically Black Colleges and Universities] and others,” Seawright said. 

Ultimately, strategists said, the move may not move the needle with the sort of independent voters vulnerable Democrats need to win over, but it will help galvanize their base.

“I don’t think that a modest $10,000 debt program to people making under $125,000 a year changes one swing voters or makes a right-leaning voter head with more gusto to the polls,” Reinish said. 

“What it does do is it could give Democrats more energy because this is something the White House campaigned on,” he continued. “Congressional Democrats and the White House can say here’s yet another thing we’ve delivered on this summer. That’s not a bad thing. That’s good.” 

Source: TEST FEED1

Democrats show reluctance to campaign with Biden

Some Democrats running in competitive reelection races in November are still reluctant to attach themselves to President Biden, even as he and the White House have been buoyed by a few weeks of good news.

Biden has in recent weeks racked up a series of major legislative victories, and he’s seen his poll numbers rebound slightly from all-time lows earlier in the summer. But that has yet to translate to enthusiasm among Democrats to embrace him on the campaign trail.

There have been some signs of that changing as primary season comes to a close, and a few experts believe Democrats are better off embracing Biden in the wake of his recent hot streak.

“Democrats can’t possibly think that Republicans won’t put them in ads with Biden even if he physically doesn’t appear with him. They’re going to be linked to Biden, so they might as well make the most of it,” said Michael Cornfield, a political scientist and associate professor at George Washington University.

“The benefits I think clearly outweigh the costs,” he added.

During a recent trip to Ohio, Democratic Senate candidate Tim Ryan and Democratic gubernatorial candidate Nan Whaley both skipped Biden’s event. Neither has appeared alongside Biden on the campaign trail in recent weeks.

Rep. Marcy Kaptur (D-Ohio), who did appear alongside Biden at an event earlier this year, recently sought to distance herself from the president in a campaign ad that states, “She doesn’t work for Joe Biden. She works for you.”

Biden has had limited travel in recent weeks, as he was sidelined by COVID-19 and more recently spent two weeks on vacation. But the president has not appeared alongside Senate candidates this summer in key races in North Carolina, Pennsylvania, New Hampshire and Arizona.

A Democratic strategist argued that incumbents and candidates will appear with Biden when it makes the most sense for their campaign strategy. 

“I think every candidate is going to look at it from his or her perspective in a very different manner and, particularly, if my demographic to win the race, for example, is white college-educated women and I’m playing on a Roe v. Wade-related issue, it may make sense to bring the president in as a rallying cry,” the strategist said.

The president has been something of a political drag in recent months, as rising costs of gas, housing, food and other goods helped sink his approval rating to a low average of 37 percent as recently as July 21, according to an average of polls from RealClearPolitics.

But momentum has started to shift, as Biden saw a flurry of congressional action in late July and early August, paired with declining gas prices and a successful counterterrorism mission that killed a top al Qaeda leader.

Biden’s poll numbers have started to rebound: A Yahoo News-YouGov poll released Wednesday found the president’s approval rating at its highest level since May, though it still sits at 40 percent.

Xochitl Hinojosa, former communications director at the Democratic National Committee (DNC), argued that Democrats should be using Biden on the campaign trail, considering the wins he has delivered.

“Because of the leadership of President Biden and Democrats in Congress, Democratic candidates have a long list of accomplishments to run on, whether it’s a strong economy, policies that lower costs, infrastructure investments and historic climate investments,” she said. “Democrats should be doing everything to tout and embrace that agenda, including utilizing President Biden and his Cabinet on the campaign trail.”

With the president’s brand starting to bounce back, a few Democrats have begun to signal they are willing to embrace Biden as campaign season heats up.

“He’s a great man. He’s a great president. I can’t wait for him to get down here. I need his help. I want his help. He’s the best I’ve ever met,” Rep. Charlie Crist told CNN on Wednesday after clinching the state’s Democratic gubernatorial nomination.

Maryland Democratic gubernatorial nominee Wes Moore is set to join Biden on Thursday at a DNC event in Montgomery County, Md. 

Sen. Mark Kelly (D-Ariz.), who is in one of the most closely watched Senate races, gave a lukewarm endorsement of the president coming to visit him on the campaign trail.

“I will welcome anybody that comes to Arizona, travel around the state at any time, as long as I’m here, if I’m not up in Washington in session, and talk about what Arizona needs,” Kelly said Sunday on CNN.

A Democratic operative described Biden’s lack of appearances with lawmakers as systematic and part of a strategy ahead of November.

“Joe Biden is old school. He knows the value of campaigning for you or against you, whatever helps you win. The goal is to win, not to massage egos,” the operative said.

Some administration officials have appeared with lawmakers to promote the Inflation Reduction Act at events around the country, which tend to draw very little attention compared to events with the president. 

Agriculture Secretary Tom Vilsack participated in a roundtable discussion with Sen. Michael Bennet (D-Colo)— who is facing a tough reelection race— in Grand Junction, Colo., last week. Transportation Secretary Pete Buttigieg, a 2020 rival of Biden’s, has also appeared in recent days with officials in Florida, New Mexico and Oklahoma.

Biden is expected to ramp up his travel after Labor Day to tout the benefits of the Inflation Reduction Act, though the White House has yet to preview where he is going or who he might appear with.

But strategists expect the White House to carefully calibrate where Biden can be most useful in announcing new funding and how he can benefit the party with just two months until the midterms.

“I think Joe Biden at the end of the day is going to be all about, how do I keep a Democratic House and a Democratic Senate?” one Democratic strategist said. “If I can help, I’ll be there. If I can’t help, I won’t be there.”

Source: TEST FEED1

Embattled spyware firm becomes ‘cautionary tale’ for industry

The embattled Israeli spyware firm NSO Group is replacing its CEO and cutting 13 percent of its workforce as it tries to recover from being blacklisted by the U.S. government. 

Experts say the longtime industry leader has become a “cautionary tale,” after allowing its flagship Pegasus spyware to become a high-profile threat to global security and human rights, with media outlets worldwide detailing how governments were abusing its tools. 

The company’s restructuring is likely tied to the Department of Commerce’s decision last fall to add the company to its entities list and the recent failure of its acquisition deal with U.S. defense contractor L3Harris, experts added. 

“Being put on the entities list was killing the company,” said James Lewis, a senior vice president and director with the strategic technologies program at the Center for Strategic and International Studies.

NSO Group suffered another blow in July, when L3Harris ended its bid to buy NSO’s spyware technology following concerns raised by the Biden administration that the acquisition would “pose a serious counterintelligence and security risk to U.S. personnel and systems.”

Apple also sued NSO Group last fall over the use of spyware on iPhones. The tech giant sought to ban the Israeli firm from using Pegasus on Apple’s hardware. 

In the lawsuit, Apple accuses NSO Group of being “amoral 21st century mercenaries who have created highly sophisticated cyber-surveillance machinery that invites routine and flagrant abuse,” The Associated Press reported. 

Experts said these events taken together are sinking the company. 

“I think NSO’s rumored acquisition by L3Harris was the best lifeboat the company had, and what we’re witnessing now is a disintegrating ship,” said Mike Sexton, a senior policy adviser for cyber at Third Way’s national security program.

Despite the restructuring and the recent scandals NSO Group has faced, there will still be a high demand for these highly sophisticated spyware tools, experts said.

“[The restructuring] won’t have much of an impact on how clients use spyware — there will always be countries that want to acquire and use spyware for malicious political ends,” said Jason Blessing, a research fellow at the American Enterprise Institute.

However, the changes could potentially impact the supply side of the market as the company seeks to downsize and be more selective about its clients, Blessing said.

“To date, NSO Group has largely dominated the spyware market, and laying off roughly 13 percent of their employees will certainly affect the firm’s ability to maintain its market share,” Blessing added.

NSO Group came under global scrutiny in July 2021, when a number of news organizations collaborated on the Pegasus Project, revealing how the company had been selling its spyware to governments who use the tool to spy on political rivals, dissidents, journalists and human right activists.

The U.S. Congress took note, and last month took steps to address the threat from foreign spyware.

House lawmakers included a provision in the Intelligence Authorization Act authorizing the director of national intelligence to prohibit the U.S. intelligence community from buying and using foreign spyware. 

The bill would also allow the president to impose sanctions on foreign government officials and firms that target U.S. officials with spyware. 

“This spyware could be used against every member of this committee, every employee of the executive branch, every journalist or political activist,” said Rep. Adam Schiff (D-Calif.), chairman of the House Intelligence Committee, at a July hearing.

U.S. officials, including diplomats, have reportedly been the victim of the spyware. 

Late last year, Reuters reported that at least nine State Department officials based in Uganda were hacked by an unknown attacker using Pegasus. Sources told Reuters at the time that the hacks took place for several months.

NSO Group also said it will now focus its business on NATO countries, a decision experts said is related to allegations of human rights abuses by governments who had purchased its spyware tool.

“Pursuing NATO countries as the primary customer base is an attempt by the firm to survive and to salvage its reputation by prioritizing business with rich democratic countries,” Blessing said.

The experts added that if NSO Group is able to rebuild its brand and increase its revenue, it will probably start working again with non-NATO countries.

“It looks like this will serve as a cautionary tale of a spyware merchant that flew too close to the sun,” Sexton said.

“NSO overextended its client list and turned a blind eye to malpractice to the point that it became politically untenable both for the Biden administration and Israel’s post-Netanyahu coalition government,” he added.

Source: TEST FEED1

How will Biden’s student loan plan impact inflation?

President Biden announced on Wednesday an executive order to cancel at least $10,000 in federal student debt per borrower and extend a payment freeze through the end of the year. 

The plan has come under fire from some high-profile economists, including former Obama economic advisers Jason Furman and Larry Summers, who said that it will fan the flames of the nation’s 40-year high inflation.  

Experts are divided over the inflationary effects Biden’s plan. Most agree, however, that even if student loan relief does lead to higher prices, the change will be marginal.  

While Biden’s order will likely give student borrowers a total of at least $300 billion in relief over a decade, most experts don’t believe it will ignite a surge of consumer spending akin to previous rounds of stimulus checks doled out during the height of the pandemic.  

Billions of the forgiven debt may never have been repaid anyway thanks to delinquencies and expanded relief programs, experts say, and the spending unlocked by the relief will likely start with other debts and recurring expenses. 

“That impact will be spread out over time, so I don’t think it’s going to be a massive sudden infusion in the economy,” said Kevin Miller, associate director of higher education at the Bipartisan Policy Center, a nonpartisan think tank, in a Wednesday interview. 

“It’s possible that when millions of borrowers look at their balance sheets and see their balance drop, that we might get sort of an exuberant moment of spending and people celebrate, but I think it’d be really hard to predict how big of an impact that would be.” 

What does student debt relief have to do with inflation? 

Critics of the plan say that lifting student debt will enable borrowers to spend far more over a short period of time, driving up demand, and thus, prices. The Federal Reserve has been hiking interest rates in an effort to reduce consumer spending that fueled inflation higher than seen in decades.  

“Pouring roughly half [a] trillion dollars of gasoline on the inflationary fire that is already burning is reckless,” Jason Furman, a Harvard professor and former top economic adviser to President Obama, tweeted on Wednesday. However, he added that price hikes resulting from increased demand would be “relatively small.” 

The Committee for a Responsible Federal Budget, which advocates for deficit reduction, estimated that $10,000 in debt cancellation per borrower could add just 15 basis points to the inflation rate in the near term through a combination of higher demand and additional federal government borrowing.  

Biden’s plan goes further than that by doubling the debt cancellation to $20,000 for Pell Grant recipients and proposing a new rule that would cut the monthly student loan payment in half for certain low-income borrowers.   

“This plan is much more expensive than we were thinking, so its inflationary effects are going to be higher than we’ve been thinking. It’s going to more than wipe away all of the gains of the Inflation Reduction Act, which was going to push in the right direction in terms of inflation,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget. 

MacGuineas added that Wednesday’s plan might spell bad news for future borrowers, arguing that it could prompt institutions to hike prices in anticipation of future debt cancellations, making higher education more expensive for younger generations. 

“Ironically, this policy could be bad for the debt, bad for inflation and bad for the affordability of college,” she said.  

‘Drop in the bucket’: Experts predict minimal inflationary impact 

Researchers at the University of Pennsylvania’s Wharton School of Business estimated Biden’s initial proposal to eliminate up to $10,000 per borrower making less than $125,000 per year would add roughly $300 billion to the federal debt over the next 10 years. They plan to update their projections to include the additional $10,000 provided to Pell Grant recipients. 

But Kent Smetters, faculty director of the Penn Wharton Budget Model, said the inflationary impact of that additional spending would be minimal. 

“In terms of money in people’s pockets, [it’s] actually not that big relative to the size of the economy,” Smetters said in a Wednesday interview. He estimated the plan would add 0.1 percentage points to overall inflation — a negligible difference between the current annual inflation rate of 8.5 percent and the Federal Reserve’s annual goal of 2 percent. 

“Over time, a very small amount of that gap would be impacted by this.” 

Alí Bustamante, deputy director of worker power and economic security at the liberal Roosevelt Institute, said that the new spending freed up by Biden’s plan amounts to a small fraction of the trillions of dollars Americans spend every year. 

“It really is just a drop in the bucket when you consider the broader economy,” he said. “And that’s assuming that everybody is just going to spend the money that they’re saving from navigating payments … we see that wealth and income constrained borrowers will ultimately use debt forgiveness to service other loans as well as increase their savings.”  

In addition, Biden’s plan aims to lift the freeze on student loan payments at the start of next year, a pandemic-era program that some economists blamed for helping fuel red-hot demand.   

“Ending the moratorium will weigh on growth and inflation, while debt forgiveness will support them. The net is largely a wash,” Moody’s Analytics chief economist Mark Zandi tweeted on Wednesday.  

Repayment restart will sap momentum 

While millions of Americans will have their student debt balanced wiped out by Biden’s action, those with debt remaining must begin paying it back in January unless they are able to enroll in a different federal forgiveness program.  

Experts say the resumption of loan payments for the first time since March 2020 will likely cause a pullback in spending that would sap momentum from rising prices. 

“That leaves 30 million people who will see their household budgets change in January, so the end of the repayment is actually a much bigger deal than the forgiveness itself,” Miller said. 

Advocates for student debt relief also argue that the growing threat of a recession — driven in part by the Fed’s attempts to fight inflation — make it essential to give borrowers a head start with payments resuming next year. 

“If it is in fact the case that there is going to be a recession or that household budgets are now being weighed down more by inflation, the reasoning for the administration to improve people’s household, financial standing is only more sure,” said Ben Kaufman, research and investigations director at the nonprofit Student Borrower Protection Center. 

Source: TEST FEED1

The Memo: New York provides latest example of abortion's impact

Two months after the Supreme Court struck down Roe v. Wade, it’s increasingly clear that abortion is having a bigger political impact than many pundits predicted.

The latest proof came in a House special election on Tuesday, as Democrat Pat Ryan beat Republican Marc Molinaro in New York’s 19th District.

The contest was significant for two reasons. 

First, Ryan placed abortion rights at the heart of his campaign. Second, the district is a classic bellwether, having been carried by former President Obama in 2012, former President Trump in 2016 and President Biden in 2020. 

If Democrats can hold off the GOP there, it shows that they still have some hope of staving off Republican advances in November.

Ryan’s win came on the heels of a striking result in Kansas earlier this month. There, abortion rights campaigners prevailed by almost 20 points on a ballot measure revolving around whether the state constitution ought to protect a right to abortion.

The outcome was more striking because Kansas hasn’t backed a Democrat for president since 1964. Trump carried the state by almost 15 points in 2020.

Then there is the general tightening of nationwide polls to consider.

On June 24, the day of the Supreme Court decision, Republicans led Democrats by 3.4 percentage points in the RealClearPolitics polling average on the so-called generic ballot — a polling question that asks respondents which party they favor in congressional elections. 

A week later, the GOP’s advantage had declined to 2.2 points. Today, the Republican edge has been all but extinguished, standing at one-fifth of a percentage point.

For abortion rights advocates, it’s evidence that what they predicated is coming true: The Supreme Court’s decision has transformed the landscape for the midterms.

“I feel like no one believed us for so long,” said Sam Lau, a spokesperson for Planned Parenthood Votes. “The majority of people support access to safe, legal abortion and they do not want the government to control these personal decisions that they want to be making themselves. That is absolutely a message that will resonate across all demographics.”

While activists such as Lau have a political interest in making those claims, there is data to back them up.

A series of polls has shown widespread disapproval of the court’s decision to strike down Roe, the 1973 decision that enshrined a constitutional right to abortion.

A Fox News poll earlier this month indicated 60 percent of registered voters disapprove of the court’s move while only 38 percent approve. A Monmouth University poll in the immediate aftermath of the decision produced an almost identical result — 60 percent disapproval and 37 percent approval. 

An Economist-YouGov poll conducted in late July and early August found the overall margin somewhat closer, with 49 percent disapproving and 38 percent approving. 

But the Economist survey also pointed to the issue’s potency with key groups. 

Self-described independents disapproved of Roe being struck down by 51 percent to 30 percent. Among all women, those who disapproved outnumbered those who approved by 25 points. Even 23 percent of Republicans — almost 1 in 4 — disapproved.

Republicans would much prefer to fight the midterms on completely different issues: inflation, immigration and crime as well as the general performance of Biden, who continues to suffer from very low approval ratings.

But the New York special election looks like the canary in the coal mine in that regard. 

Republican candidate Molinaro was far from an anti-abortion hard-liner — prior to the Supreme Court decision he had accepted Roe as settled law. He also sought to keep the spotlight on the economy and local issues. 

Clearly, his efforts were not successful.

Some liberal strategists argue that voters are not buying the media framing of the issues in the midterms, in which topics such as inflation are “kitchen table issues,” whereas abortion is a more abstract matter of “values.”

“Abortion rights are everyday issues facing millions of Americans,” said Democratic operative Abigail Collazo. “Republicans are hoping people don’t know that. But people do know that. They know what issues impact them.”

Collazo also took issue with the idea that the salience of abortion varies depending upon the state and the extent to which abortion access is directly threatened.

“Americans do not view their rights and freedoms as being unique to their state,” she argued. “People move. They have families and friends and communities that cross state lines. Those sorts of boundaries do not make people less concerned about their access to health care — think of parents sending their kids to schools out of state.”

To be sure, the abortion issue is not a panacea to the problems Democrats are facing. 

Republicans are still favored to take the House in November, though by a more modest margin than was thought likely a few months ago. GOP strategists continue to believe that the economy will have greater prominence in voters’ minds than any other issue.

There are, too, other issues that have helped Democrats’ fortunes edge up. Gas prices have declined from their peak, and earlier crises such as the infant formula shortage have faded.

Still, the signs are plain that abortion is reverberating.

A new analysis this week by a Democratic data firm found that several states are seeing a surge in female voter registration. The firm, TargetSmart Insights, found that woman had outregistered men by significant margins in states including Michigan, Wisconsin and Pennsylvania, all of which will see competitive statewide races in November.

Republicans might dismiss such statistics coming from a Democratic firm.

But the results at the polls in Kansas and New York are harder to dispute.

“The stakes are no longer hypothetical,” said Lau. “The issue of abortion, and reproductive rights and reproductive freedom, is being put at the forefront of campaigns across the country.”

The Memo is a reported column by Niall Stanage.

Source: TEST FEED1